Credit Increase- CC's

[Zee09]

I have a MC I quit using but it is still open. It was my Amazon file card.
I keep getting credit increases on it. This AM. they increased it another $7K

How do the credit card companies decide on unsolicited credit increases.
My buddy swears they want to keep you in debt- his wife anyway.

My card is paid off but hasn't been active for about 8 months. Amazon was the fastest out there but I did
not like their policies so I used to use that card about 70 times a month or so- now I don't at all. It was from Citi Bank.
Card was not a business card-personal. I have not paid off anything else during that time either.

 

[Leo99]

They tend to keep that kind of stuff a secret. Any increase is good. Means they like you! Some credit cards are liberal with increases and some are stingy.

 

[StevieC]

When I login to my online accounts for my cards they keep having a splash screen for "You qualify for a credit limit increase, click here to accept the $xxxx.xx increase" I always click the "No Thanks" button. I have too much as it is and never use a fraction of it.

They don't make money unless people are carrying balances month to month at their normally insane interest rates so folks with good credit like me and you will keep getting these offers in hopes they might hook one of us into the "never never club".

They also loose on me because I don't carry balances and I have cashback rewards with premium rebate amounts so they loose about $700-$1,000 a year rebated back to me for an annual fee of $99. I put everything I can on it including coffee at the drive-thru rather than using Debit or Cash so I can drive the rewards up.

 

[CT8]

Being in debt and living from pay check to paycheck is the American way. Buy more stuff to impress the neighbors.

 

[JustN89]

Just because your LOC increased doesn't mean you have to spend it. An increased LOC will actually help your credit score. If they're willing to give you an increase without a credit check, that sounds like a good thing to me.

 

[Zee09]

I think your right- of course you are

It was one of these 3 year no interest cards and after that I would have bailed anyway.
I remember in the recession B of A and Discover cut my limit in half and said since I didn't keep balances
I did not need that credit limit.... now a few years ago they gave it back.

 

[Donald]

They have a point system they use to determine if they should increase your credit limit. They do soft pulls all the time from the credit reporting agencies. As others have mentioned, some banks give out credit generously and some do not.,

 

[deven]

My Amazon card wasn't active for over 12 months and they just closed my account. My credit took a 5 point hit just for that. Unreal!

 

[Zee09]

Originally Posted by Donald
They have a point system they use to determine if they should increase your credit limit. They do soft pulls all the time from the credit reporting agencies. As others have mentioned, some banks give out credit generously and some do not.,


So all increases are due to a credit rating upswing?
Yes some banks are very tight on the credit!

 

[Lyman]

I personally like a low limit card for my Internet purchases. I use one that is $1k limit. I have some others that are $10k and $15k that both started out as $5k cards. I never use them.

 

[Lolvoguy]

As mentioned before, if you simply call them and let them know you don't want the increase, they'll put it on your record and stop and additional increases unless you request them.

Did this about 10 years ago with a MC. Never had another increase again.

 

[ssamaroo01]

I bought an Explorer last week. Put down $5k on my AMEX card. Paid it off two days after the amount posted. The statement will come out in 4 days where I'll earn an additional 5k points. They increased my credit limit by $5k yesterday.

 

[Virtus_Probi]

I kept getting credit limit increases on my main card even though I never carried a balance or put any giant purchases on there, to the point where I could buy a pretty nice German luxury car with it if I chose.
I think I may have put big deposits for vehicles on it, but always actually paid with cashier's checks.
This seemed to have stopped when I froze my credit, although that might have been a coincidence.
Both of our residences and all of our cars are paid for, so I don't have much use for new credit. Maybe my score is dropping as a result, but I don't care.

 

[dogememe]

Good! Credit line increases are awesome because it lowers your utilization % if you have any balance on any of your cards which is good for your credit score.

 

[Andrew1972]

Do credit reports have any idea what you make and that causes an inquiry issue.

I am happy my wife is getting rejected for two store cards thus far this year and not sure why. Our credit score is fine but we tend to run up our Amazon card to near max but always pay off with never a late or less then full payment.

 

[Pelican]

All credit cards, including those with 0 balance are viewed as "Liabilities" up to the maximum limit by your lenders and do affect your ability to borrow.
Carry only the CC you use the most and to the limit you can easily pay off when the bill comes. Get rid of all cards you don't use.
If you need to borrow DON'T use a CC the rate is astronomical.

 

[StevieC]

Originally Posted by dogememe
Good! Credit line increases are awesome because it lowers your utilization % if you have any balance on any of your cards which is good for your credit score.

I wish that was the case in Canada, In Canada they will take into account how much credit you have available and if it's over a certain percentage it starts affecting your score negatively.

 

[JustN89]

Originally Posted by Pelican
All credit cards, including those with 0 balance are viewed as "Liabilities" up to the maximum limit by your lenders and do affect your ability to borrow.
Carry only the CC you use the most and to the limit you can easily pay off when the bill comes. Get rid of all cards you don't use.
If you need to borrow DON'T use a CC the rate is astronomical.

This just isn't accurate at all.

Your credit cards, and by extent your credit limit, are not a "liability". It's seen as spending power or available income by lenders. What hurts your credit is your percent of utilization. Once you go over 30% utilization, it will start negatively impacting your score and therefore you ability to borrow money. A credit limit increase will actually lower your total utilization and help your score.

Edit: It would probably be beneficial to actually list what impacts your credit score, by highest impact to lowest impact:

1. Payment history
2. Debt-to-Credit ratio (see: credit utilization)
3. Length of credit history
4. New credit accounts (combined in here is inquiries)
5. Type of credit accounts (revolving credit, installment accounts, etc)

 

[csandste]

I never ask for a credit increase but don't try to stop them. Have a perfect (free look thru cards) FICO and close to that on my two Credit Karma accounts. Recently had a card dropped from non use and a couple others might be cancelled from lack of use too. The lower your utilization, the better your score. Only carry two cards and have paid everything off monthly for the last twenty years or more. Don't like buying stuff, my place is messy enough as it is-- I'm old and set in my ways. Know what I want at Aldi, Costco, Walmart and Dollar Tree-- that's about it other than occasional Amazon orders. Actually get nervous in my old age roaming around strange stores.

Check Credit Karma regularly to see if there's any hard hits on my credit reporting agencies. Credit Karma is one of my favorite sites and they never send me texts or emails, only display ads on site in case I need another card-- won't ever!

 

[jcartwright99]

Having worked for a credit bureau, I can tell you how they do it. Credit grantors usually run reviews of their accounts with the different bureaus. Obviously, there are a lot different variables they can check a lot of different algorithms they run your data through.You get scored on these, much like you would with FICO. Based on these variables if you score high enough, they will increase your credit. The goal being to entice you to use your card.

They do a similar things to predict when people will stop paying, almost a predictive delinquent card holder. If they start noticing you are becoming a deadbeat, they will reel in your credit line.

All of these are really just algo's that are based off of years and years of predictive statistics.